ex10-2.htm


    SECOND
AMENDED AND RESTATED GUARANTY

     

    SECOND AMENDED AND RESTATED
GUARANTY, dated as of June 26, 2008 (the “Guaranty”), made by
PHH CORPORATION (the
“Guarantor”) in
favor of THE ROYAL BANK OF
SCOTLAND PLC (“RBS”) in its capacity
as Buyer under the Amended and Restated Master Repurchase Agreement referred to
below and as Purchaser under the MLPSA referred to below and in favor of GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC. (“GCFP”) in its capacity as Purchaser under the MLPSA referred to
below.

    RECITALS

     

    WHEREAS,
pursuant to the Master Repurchase Agreement, dated as of November 1, 2007 (the
“Original Repurchase
Agreement”), between PHH Mortgage Corporation (“PHH”) as Seller, and
GCFP, as buyer, GCFP agreed to enter into Transactions with PHH upon the terms
and subject to the conditions set forth therein;

     

    WHEREAS,
it was a condition precedent to the obligation of GCFP to enter into any such
Transaction with PHH under the Repurchase Agreement that the Guarantor enter
into the guaranty on April 15, 2008 (the “Original
Guaranty”);

     

    WHEREAS,
on the date hereof, GCFP will assign to The Royal Bank of Scotland plc (“Buyer”)
and Buyer will undertake and assume for the benefit of GCFP, all of GCFP’s
right, title, obligation and interest in, to and under the Original Repurchase
Agreement and all Program Documents related thereto, including the Original
Guaranty;

     

    WHEREAS,
pursuant to a Mortgage Loan Purchase and Sale Agreement, dated as of April 15,
2008 (the “MLPSA”) by and
between PHH, as seller (in such capacity, together with PHH as seller under the
Repurchase Agreement, the “Seller”), and RBS and
GCFP, as purchasers (each, a “Purchaser” and
together, the “Purchasers”), each
Purchaser severally agreed to purchase Participation Certificates evidencing
particular GNMA Mortgage Loans, FNMA Mortgage Loans or FHLMC Mortgage Loans from
the Seller upon the terms and subject to the conditions set forth
therein;

     

    WHEREAS,
to secure the obligations of Seller to each Purchaser under the MLPSA (the
“MLPSA
Obligations”) each Purchaser required that the Guarantor execute and
deliver the Original Guaranty to each Purchaser;

     

    WHEREAS,
Buyer and PHH have agreed to amend and restate the Original Repurchase Agreement
on the date hereof upon the terms and conditions set forth therein (such amended
and restated Agreement, as further amended, supplemented and otherwise modified
from time to time, the “Repurchase
Agreement”);

     

    WHEREAS,
pursuant to the Repurchase Agreement, Buyer will enter into Transactions with
PHH upon the terms and subject to the conditions set forth therein;
and

     

    WHEREAS,
in connection with the amendment and assignment of the Original Repurchase
Agreement, the Guarantor, GCFP and RBS desire to amend and restate the Original
Guaranty as provided herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    NOW,
THEREFORE, in consideration of the premises and to induce Buyer to enter into
the Repurchase Agreement and to enter into the Transactions with the Seller
under the Repurchase Agreement and induce GCFP and RBS to purchase Participation
Certificates from the Seller under the MLPSA, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Guarantor hereby agrees with RBS and GCFP as follows:

     

    1.  Defined
Terms.

     

    (a)           Unless
otherwise defined herein, capitalized terms defined in the Repurchase Agreement
and used herein shall have the meanings given to them in the Repurchase
Agreement.  Capitalized terms defined in the MLPSA and used herein
shall have the meanings given to them in the MLPSA.  The following
additional terms shall have the following meanings:

     

    “Agreement” or “Agreements” shall
mean (i) the Repurchase Agreement or any other Program Document (ii) the MLPSA,
or (iii) any other document made, delivered or given in connection therewith or
herewith, as such may be amended, supplemented or modified from time to
time.

     

    “Guaranteed
Obligations” shall mean any and all obligations and liabilities of the
Seller to Buyer and each Purchaser under the Agreements, including without
limitation the obligations, which may arise under, or out of or in connection
with the Repurchase Agreement or any other Program Document, and the MLPSA
Obligations, in each case whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, whether on account
of principal, interest, reimbursement obligations, any and all Claims (as
defined in Section 101 of the Bankruptcy Code) of Buyer or any Purchaser against
the Seller in respect thereof, and any and all fees, indemnities, costs,
expenses arising out of or relating thereto (including, without limitation, all
fees and disbursements of counsel to Buyer and the Purchasers that are required
to be paid by the Seller pursuant to the terms of the Agreements).

    “Material Adverse
Effect” shall mean a material adverse effect on (a) the ability of the
Guarantor to perform in all material respects its obligations under this
Guaranty, including, but not limited to, a material adverse effect on the
property, business, operations or financial condition of the Guarantor, (b) the
validity or enforceability in all material respects of this Guaranty, (c) the
rights and remedies of Buyer or any Purchaser under this Guaranty, or (d) the
timely payment of the Guaranteed Obligations or all other amounts payable in
connection herewith or therewith.  Each of (a), (b) and (c) in the
foregoing sentence shall be determined by each of Buyer and each Purchaser, as
the case may be, in its sole reasonable discretion.

     

    “MLPSA Obligations”
shall have the meaning set forth in the fifth WHEREAS clause of this
Guaranty.

     

    “Revolving Credit
Agreement” shall mean the Five Year Competitive Advance and Revolving
Credit Agreement, dated as of January 6, 2006, among the Guarantor, as Borrower,
the Lenders referred to therein, Citicorp USA, Inc., as Syndication Agent, and
Bank of America, N.A., The Bank of Nova Scotia and Calyon New York Branch, as
Documentation Agents, and JPMorgan Chase Bank, N.A., as administrative agent, as
such agreement exists on 

     

    
      
        
        

      

      
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    the date
hereof and as the same may be further amended, modified, waived or supplemented,
solely to the extent that Buyer has given its prior written consent to such
amendment, modification, waiver or supplement.

     

    (b)           The
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Guaranty shall refer to this Guaranty as a whole and not to any
particular provision of this Guaranty, and section and paragraph references are
to this Guaranty unless otherwise specified.

     

    (c)           The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

     

    2.  Guaranty.

     

    (a)           The
Guarantor hereby unconditionally and irrevocably guaranties to Buyer, each
Purchaser and each of their respective successors, indorsees, transferees and
assigns, the prompt and complete payment and performance by the Seller when due
(whether at the stated maturity, by acceleration or otherwise) of the Guaranteed
Obligations.

     

    (b)           The
Guarantor further agrees to pay any and all expenses (including, without
limitation, all reasonable fees and disbursements of counsel) which may be paid
or incurred by Buyer or the applicable Purchaser in enforcing, or obtaining
advice of counsel in respect of, any rights with respect to, or collecting, any
or all of the Guaranteed Obligations and/or enforcing any rights with respect
to, or collecting against, the Guarantor under this Guaranty; provided, however, that the Guarantor
shall not be liable for the fees and expenses of more than one separate firm for
each Purchaser or Buyer, as Buyer, in connection with any one such action or any
separate, but substantially similar or related actions in the same jurisdiction,
nor shall the Guarantor be liable for any settlement or proceeding effected
without the Guarantor’s written consent.  This Guaranty shall remain
in full force and effect until the Guaranteed Obligations are paid in
full.

     

    (c)           No
payment or payments made by the Seller or any other Person or received or
collected by the Guarantor from the Seller or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application, at any time
or from time to time, in reduction of or in payment of the Guaranteed
Obligations shall be deemed to modify, reduce, release or otherwise affect the
liability of the Guarantor hereunder which shall, notwithstanding any such
payment or payments (other than payments made by the Guarantor in respect of the
Guaranteed Obligations or payments received or collected from the Guarantor in
respect of the Guaranteed Obligations), remain liable for the Guaranteed
Obligations until the Guaranteed Obligations are paid in full.

     

    3.  Representations, Warranties
and Covenants of Guarantor.

     

    (a)           The
Guarantor hereby represents and warrants as of the date hereof:

     

    (i)           Existence.  Guarantor
(a) is a corporation duly organized, validly existing and in good standing
under the laws of the State of Maryland, (b) has all requisite corporate or
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    authorizations,
consents and approvals, necessary to own its assets and carry on its business as
now being or as proposed to be conducted, except where the lack of such
licenses, authorizations, consents and approvals would not be reasonably likely
to have a Material Adverse Effect, (c) is qualified to do business and is
in good standing in all other jurisdictions in which the nature of the business
conducted by it makes such qualification necessary, except where failure so to
qualify would not be reasonably likely (either individually or in the aggregate)
to have a Material Adverse Effect, and (d) is in compliance in all material
respects with all Requirements of Law.

     

    (ii)           Financial
Condition.  Guarantor has heretofore furnished to Buyer and the
Purchasers a copy of its (A) consolidated balance sheet for the fiscal year
ended December 31, 2007 and the related consolidated statements of income and
retained earnings and of cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous year, with the opinion
thereon of a nationally recognized public accounting firm and (2) consolidated
balance sheet for the quarterly fiscal period(s) ended March 31, 2008 and the
related consolidated statements of income and retained earnings and of cash
flows for it for such quarterly fiscal period(s), setting forth in each case in
comparative form the figures for the previous year.  All such
financial statements are complete and correct in all material respects and
fairly present the consolidated financial condition of Guarantor and its
Subsidiaries and the consolidated results of their operations for the fiscal
year ended on said date, all in accordance with GAAP applied on a consistent
basis.  Since December 31, 2007 there has been no development or event
nor any prospective development or event, including the developments and events
disclosed in (A) the public filings made by Guarantor with the Securities and
Exchange Commission since December 31, 2007 and (B) the diligence materials
previously provided to Buyer or the applicable Purchaser by Seller and
Guarantor, which has had or should reasonably be expected to have a Material
Adverse Effect.

     

    (iii)           Representations and
Warranties Incorporated by Reference.  Each of the
representations and warranties made by Guarantor in its capacity as Borrower (as
such term is defined in the Revolving Credit Agreement) set forth in Section 3
of the Revolving Credit Agreement are true and correct and Guarantor hereby
makes each such representation and warranty to, and for the benefit of, Buyer
and the Purchasers as if the same were set forth herein in full.

     

    (b)           The
Guarantor covenants and agrees with Buyer and each Purchaser that until payment
in full of the Guaranteed Obligations:

     

    (i)           Financial
Statements and Other Information; Financial Covenants.

     

    
      
        
        

      

      
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    Guarantor
shall deliver to Buyer and each Purchaser:

     

    (A)  As soon
as available and in any event within 60 days after the end of each of the first
three quarterly fiscal periods of each fiscal year of Guarantor, a certification
in the form of Exhibit A-1 to the Repurchase Agreement together with the
consolidated balance sheets of Guarantor and its consolidated Subsidiaries as at
the end of such period and the related unaudited consolidated statements of
income and retained earnings and of cash flows for Guarantor and the
consolidated Subsidiaries of Guarantor for such period and the portion of the
fiscal year through the end of such period, setting forth in each case in
comparative form the figures for the previous year, accompanied by a certificate
of a Responsible Officer of Guarantor, which certificate shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of Guarantor and the Subsidiaries of
Guarantor in accordance with GAAP, consistently applied, as at the end of, and
for, such period (subject to normal year-end audit adjustments);

     

    (B)  As soon
as available and in any event within 100 days after the end of each fiscal year
of Guarantor, the consolidated balance sheets of Guarantor and its consolidated
Subsidiaries as at the end of such fiscal year and the related consolidated
statements of income and retained earnings and of cash flows for Guarantor and
its consolidated Subsidiaries for such year, setting forth in each case in
comparative form the figures for the previous year, accompanied by an opinion
thereon of independent certified public accountants of recognized national
standing, which opinion shall not be qualified as to scope of audit or going
concern and shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations of
Guarantor and its consolidated Subsidiaries at the end of, and for, such fiscal
year in accordance with GAAP;

     

    (C)  From time
to time such other information regarding the financial condition, operations, or
business of Guarantor as Buyer or the Purchasers may reasonably request;
and

     

    (D)  Guarantor
will furnish to Buyer and each Purchaser, at the time it furnishes each set of
financial statements pursuant to paragraphs (A) or (B) above, a
certificate of a Responsible Officer of Guarantor to the effect that, to the
best of such Responsible Officer’s knowledge, Guarantor during such fiscal
period or year has observed or performed all of its covenants and other
agreements, and satisfied every material condition, contained in this Guaranty
to be observed, performed or satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Default, Event of Default or Event of
Termination except as specified in such certificate (and, if any Default, Event
of Default or Event of Termination has occurred and is continuing, describing
the same in reasonable detail and describing the action Guarantor has taken or
proposes to take with respect thereto).

     

    (ii)           Covenants Incorporated by
Reference.  Guarantor is in compliance with each of the
covenants made by Guarantor in its capacity as Borrower (as such term is defined
in the Revolving Credit Agreement) set forth in Sections 5 

     

    
      
        
        

      

      
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    and 6 of
the Revolving Credit Agreement and Guarantor hereby makes each such covenant to,
and for the benefit of Buyer as if the same were set forth herein in
full.  Guarantor, in its capacity as Borrower (as such term is defined
in the Revolving Credit Agreement) shall not agree to any amendment, supplement
or other modification to the Revolving Credit Agreement without Buyer’s written
consent.

     

    4. 
Right of
Set-off.  The Guarantor
hereby irrevocably authorizes RBS, GCFP and each of their respective Affiliates
at any time and from time to time without notice to the Guarantor or any of its
Affiliates or Subsidiaries, any such notice being expressly waived by the
Guarantor, to set-off and appropriate and apply any and all property and
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by RBS, GCFP or any of their respective
Affiliates to or for the credit or the account of the Guarantor or any of its
Affiliates or Subsidiaries, or any part thereof in such amounts as RBS, GCFP or
any of their respective Affiliates may elect, against and on account of the
Guaranteed Obligations and liabilities of the Guarantor to RBS or GCFP hereunder
and claims of every nature and description of RBS or GCFP or any of their
respective Affiliates against the Guarantor or any of its Affiliates or
Subsidiaries, in any currency, whether arising hereunder, under the Agreements
or under any other agreement between the parties hereto or between Guarantor or
any of its Subsidiaries or Affiliates and RBS, GCFP or any of their respective
Affiliates (other than the Bishop’s Gate Facility and the Chesapeake Facility),
or otherwise, as RBS or GCFP may elect, whether or not RBS or GCFP has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured.  RBS or GCFP shall notify the Guarantor
promptly of any such set-off and the application made by RBS or GCFP, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.  The rights of RBS and GCFP under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which RBS or GCFP may have.

     

    5. 
No
Subrogation.  Notwithstanding
any payment or payments made by the Guarantor hereunder or any set-off or
application of funds of the Guarantor by RBS or GCFP, the Guarantor shall not be
entitled to be subrogated to any of the rights of RBS and GCFP against the
Seller or any other guarantor or any collateral security or guarantee or right
of offset held by RBS and GCFP or any of their respective Affiliates for the
payment of the Guaranteed Obligations, nor shall the Guarantor seek or be
entitled to seek any contribution or reimbursement from the Seller or any other
guarantor in respect of payments made by the Guarantor hereunder, until all
amounts owing to RBS or GCFP by the Seller on account of the Guaranteed
Obligations are paid in full.  If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when all of the
Guaranteed Obligations shall not have been paid in full, such amount shall be
held by the Guarantor in trust for RBS or GCFP, as applicable, segregated from
other funds of the Guarantor, and shall, forthwith upon receipt by the
Guarantor, be turned over to RBS or GCFP, as applicable, in the exact form
received by the Guarantor (duly indorsed by the Guarantor to RBS or GCFP, as
applicable, if required), to be applied against the Guaranteed Obligations,
whether matured or unmatured, in such order as RBS or GCFP, as applicable, may
determine.

     

    
      
        
        

      

      
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    6. 
Amendments,
Etc. with Respect to the Guaranteed Obligations.  The Guarantor
shall remain obligated hereunder notwithstanding that, without any reservation
of rights against the Guarantor and without notice to or further assent by the
Guarantor, any demand for payment of any of the Guaranteed Obligations made by
RBS or GCFP, as applicable, may be rescinded by RBS or GCFP, as applicable, and
any of the Guaranteed Obligations continued, and the Guaranteed Obligations, or
the liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by RBS or GCFP, as
applicable, and the Agreements may be amended, modified, supplemented or
terminated, in whole or in part, as RBS or GCFP may deem advisable from time to
time, and any collateral security, guarantee or right of offset at any time held
by RBS or GCFP for the payment of the Guaranteed Obligations may be sold,
exchanged, waived, surrendered or released.  Neither RBS nor GCFP
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Guaranteed Obligations or for this Guaranty
or any property subject thereto. When making any demand hereunder against the
Guarantor, RBS and GCFP may, but shall be under no obligation to, make a similar
demand on the Seller or any other guarantor, and any failure by RBS or GCFP to
make any such demand or to collect any payments from the Seller or any such
other guarantor or any release of the Seller or such other guarantor shall not
relieve the Guarantor of its Guaranteed Obligations or liabilities hereunder,
and shall not impair or affect the rights and remedies, express or implied, or
as a matter of law, of RBS and GCFP against the Guarantor.  For the
purposes hereof “demand” shall include the commencement and continuance of any
legal proceedings.  RBS or GCFP may release any Purchased Items
purchased by it in its sole discretion.  The Guarantor hereby further
consents to any renewal or modification of any Guaranteed Obligation or MLPSA
Obligation or any extension of the time within which such is to be performed and
to any other indulgences, whether before or after the date of this Guaranty, and
waives notice with respect thereto.

     

    7. 
Waiver of
Rights.  The Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Guaranteed Obligations, and notice of or proof of reliance by RBS or
GCFP, as applicable, upon this Guaranty or acceptance of this Guaranty; the
Guaranteed Obligations, and any of them shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon this Guaranty; and all dealings pursuant to the Agreements
between the Seller and the Guarantor, on the one hand, and RBS or GCFP, on the
other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Guaranty.  The Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the Seller or the Guarantor with respect to the Guaranteed
Obligations.  The Guarantor hereby waives diligence; presentment;
demand for payment or performance; filing of claims with any court in case of
the insolvency, reorganization or bankruptcy of the Seller; protest or notice
with respect to the Guaranteed Obligations or the amounts payable by the Seller
thereunder; and all demands whatsoever; any fact, event or circumstance that
might otherwise constitute a legal or equitable defense to or discharge of the
Guarantor, including (but without typifying or limiting this waiver), failure by
Buyer or the applicable Purchaser to perfect a security interest in any
collateral securing performance of any Guaranteed Obligation or MLPSA Obligation
or to realize the value of any collateral or other assets which may be available
to satisfy any 

     

    
      
        
        

      

      
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    Guaranteed
Obligation or MLPSA Obligation and any delay by Buyer or the Purchaser in
exercising any of its rights hereunder or against the Seller.

     

    8. 
Guaranty
Absolute and Unconditional.  The Guarantor
understands and agrees that this Guaranty shall be construed as a continuing,
absolute and unconditional guarantee of the full and punctual payment and
performance by the Seller of the Guaranteed Obligations and not of
collectibility only and in no way conditioned upon any requirement that RBS or
GCFP, as applicable, first attempt to collect any of the obligations from the
Seller without regard to (i) the validity, regularity or enforceability of the
Agreements, any of the Guaranteed Obligations, or any other collateral security
therefor the Guaranteed Obligations or guarantee or right of offset with respect
thereto at any time or from time to time held by RBS or GCFP, as applicable,
(ii) any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the Seller
against RBS or GCFP, as applicable, (iii) any defense by the Seller to the
Guaranteed Obligations or the ownership of RBS or GCFP, as applicable, in the
Participation Certificates or Purchased Items, as applicable, or any
subordination of any Lien on the Participation Certificates or Purchased Items,
as applicable, or (iv) any other circumstance whatsoever (with or without notice
to or knowledge of the Seller or the Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Seller from the
Guaranteed Obligations, or of the Guarantor from this Guaranty, in bankruptcy or
in any other instance.  The Guarantor understands and agrees that this
Guaranty shall be construed as a continuing, absolute and unconditional
guarantee without regard to waiver, forbearance, compromise, release,
settlement, the dissolution, liquidation, reorganization or other change
regarding the Seller, or the Seller being the subject of any case or proceeding
under any bankruptcy or other law for the protection of debtors or creditors, or
any other action or matter that would release a guarantor.  When
pursuing its rights and remedies hereunder against the Guarantor, RBS and GCFP,
as applicable, may, but shall be under no obligation to, pursue such rights and
remedies as it may have against the Seller or any other Person or against any
collateral security or guarantee for the Guaranteed Obligations or any right of
offset with respect thereto, and any failure by RBS or GCFP, as applicable, to
pursue such other rights or remedies or to collect any payments from the Seller
or any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the Seller
or any such other Person or any such collateral security, guarantee or right of
offset, shall not relieve the Guarantor of any liability hereunder, and shall
not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of RBS or GCFP, as applicable, against the
Guarantor.  This Guaranty shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon the Guarantor and
the successors and assigns thereof, and shall inure to the benefit of RBS, GCFP
and their respective successors, indorsees, transferees and assigns, until all
the Guaranteed Obligations and the obligations of the Guarantor under this
Guaranty shall have been satisfied by payment in full and each Agreement shall
be terminated, notwithstanding that from time to time during the term of the
Repurchase Agreement or the MLPSA the Seller may be free from any Guaranteed
Obligations and subject to the provisions of Section 9 hereof.

     

    9. 
Reinstatement.  This Guaranty
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Guaranteed Obligations is
rescinded or must otherwise be restored, or returned by RBS or GCFP upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the Seller
or the Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for the Seller or
the 

     

    
      
        
        

      

      
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    Guarantor
or any substantial part of its property, or otherwise, all as though such
payments had not been made.

     

    10.  Events of
Default.  Each of the
following events and occurrences shall constitute an “Event of Default” under
this Guaranty:

     

    (a)   the
Guarantor shall default in the payment of any amount required to be paid by it
under the Guaranty; or

     

    (b)   any
representation, warranty or certification made or deemed made herein by the
Guarantor or any certificate furnished by the Guarantor to Buyer or the
Purchasers pursuant to the provisions thereof, shall prove to have been false or
misleading in any material respect as of the time made or furnished; provided, however, that any such false
or misleading representation, warranty or certification incorporated into this
Guaranty by reference pursuant to Section 3(a)(iii) shall not constitute an
Event of Default hereunder if such false or misleading representation, warranty
or certification has been expressly waived by Buyer or the Purchasers;
or

     

    (c)   the
Guarantor shall fail to observe or perform any covenant set forth or
incorporated by reference in Section 3(b) of this Guaranty, and such failure to
observe or perform shall continue unremedied for a period of five (5) Business
Days after the earlier of discovery of such failure by or notice of such failure
to Guarantor or such longer cure period as may be specified in such covenant;
provided, however, that the failure to
observe or perform any covenant incorporated into this Guaranty by reference in
Section 3(b)(ii) shall not constitute an Event of Default hereunder if such
failure has been expressly waived by Buyer or the Purchasers; or

     

    (d)   an
Event of Default (as defined in the Revolving Credit Agreement; such Event of
Default, a “Revolver Event of Default”) under the Revolving Credit Agreement
shall have occurred; provided, however, that any such
Revolver Event of Default shall not constitute an Event of Default hereunder if
such Revolver Event of Default has been expressly waived by Buyer.

     

    11. 
Payments.  The Guarantor
hereby guarantees that payments hereunder will be paid to Buyer and each
Purchaser, as applicable, without set-off or counterclaim in Dollars in
accordance with the wiring instructions of Buyer or the applicable
Purchaser.

     

    12. 
Notices.  All notices,
requests and other communications provided for herein (including without
limitation any modifications of, or waivers, requests or consents under, this
Guaranty) shall be given or made in writing (including without limitation by
telex or telecopy) delivered to the intended recipient at the “Address for
Notices” specified below its name on the signature pages, with respect to the
Repurchase Agreement or in Annex A, with respect to the MLPSA; or, as to any
party, at such other address as shall be designated by such party in a written
notice to each other party.  All such communications shall be deemed
to have been duly given when transmitted by telex or telecopy or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.

     

    
      
        
        

      

      
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    13. 
Severability.  Any provision of
this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     

    14. 
Integration.  This Guaranty and
the Agreements represent the agreement of the Guarantor with respect to the
subject matter hereof and thereof and there are no promises or representations
by Buyer or the applicable Purchaser relative to the subject matter hereof or
thereof not reflected herein or therein.

     

    15.  Amendments in Writing; No
Waiver; Cumulative Remedies.

     

    (a)   None
of the terms or provisions of this Guaranty may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Guarantor,
Buyer and the applicable Purchaser, provided that any provision of this Guaranty
may be waived by Buyer and the applicable Purchaser.

     

    (b)   Buyer
and the applicable Purchaser shall not by any act (except by a written
instrument pursuant to Section 15(a) hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof.  No failure to exercise, nor any delay in
exercising, on the part of Buyer and the applicable Purchaser, any right, power
or privilege hereunder shall operate as a waiver thereof.  No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.  A waiver by Buyer or the applicable Purchaser of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which Buyer or the applicable Purchaser would otherwise have
on any future occasion.

     

    (c)   The
rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by
law.

     

    16. 
Section
Headings.  The section
headings used in this Guaranty are for convenience of reference only and are not
to affect the construction hereof or be taken into consideration in the
interpretation hereof.

     

    17. 
Successors
and Assigns.  This Guaranty
shall be binding upon the successors and assigns of the Guarantor and shall
inure to the benefit of Buyer, or the applicable Purchaser and their respective
successors and assigns.  This Guaranty may not be assigned by the
Guarantor without the express written consent of Buyer and the applicable
Purchaser in their sole discretion and any attempt to assign or transfer this
Guaranty without such consent shall be null and void and of no effect
whatsoever.  Any of Buyer or any Purchaser may assign the Guaranty at
any time without the consent of the Guarantor.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    18. 
Assignment;
Amendment and Restatement of Original Guaranty; No Novation.

     

    (a)   The
Guarantor hereby acknowledges and agrees to the assignment of the Original
Repurchase Agreement and the Original Guaranty to Buyer pursuant to Section 46
of the Repurchase Agreement and hereby makes each of the acknowledgments,
agreements and covenants set forth in Sections 46(b) and (c) thereof for the
benefit of GCFP and RBS as if the same were set forth herein in
full.

     

    (b)   As
of the date first written above, the terms and provisions of the Original
Guaranty shall be further and hereby are amended, superseded and restated in
their entirety by the terms and provisions of this Guaranty.

     

    (c)   Notwithstanding
the amendment and restatement of the Original Guaranty by this Guaranty, any
amounts owing to the Buyer under the Original Guaranty whether on account of
principal, interest or otherwise which remain outstanding as of the date hereof,
shall constitute obligations owing hereunder.  This Guaranty is given
in substitution for the Original Guaranty, and not as payment of the obligations
of the Guarantor thereunder, and is in no way intended to constitute a novation
of the Original Guaranty.

     

    (d)   Upon
the effectiveness of this Guaranty on the date first written above, unless the
context otherwise requires, each reference to the Original Guaranty in any of
the Program Documents and in each document, instrument or agreement executed
and/or delivered in connection therewith shall mean and be a reference to this
Guaranty.  Except as expressly modified as of the date hereof, all of
the other Program Documents shall remain in full force and effect and are hereby
ratified and confirmed.

     

    19. 
Governing
Law.  This Guaranty
shall be governed by New York law without reference to choice of law doctrine
(but with reference to Section 5-1401 of the New York General Guaranteed
Obligations Law, which by its terms applies to this Guaranty).

     

    20. 
SUBMISSION
TO JURISDICTION; WAIVERS.  THE GUARANTOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY:

     

    (A)  SUBMITS FOR ITSELF AND ITS PROPERTY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTY AND THE AGREEMENTS,
OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF, OR THE COURTS OF THE STATE OF NEW YORK, WITHIN THE COUNTY OF NEW YORK,
IN THE EVENT THE FEDERAL COURT LACKS OR DECLINES
JURISDICTION;

     

    (B)  CONSENTS THAT ANY SUCH ACTION OR
PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW,
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING IN ANY 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;

     

    (C)  AGREES THAT SERVICE OF PROCESS IN ANY
SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY
REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH
OTHER ADDRESS OF WHICH RBS OR GCFP SHALL HAVE BEEN NOTIFIED;
AND

     

    (D)  AGREES THAT NOTHING HEREIN SHALL
AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER
JURISDICTION.

     

    21.  WAIVER OF JURY
TRIAL.  EACH OF THE GUARANTOR, RBS AND GCFP HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTY, ANY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.

     

    22. 
Termination.  This Guaranty
shall terminate upon the final payment in full of the Guaranteed Obligations and
the termination of each Agreement.

     

    [Signature
Page Follows]


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the undersigned have caused this Guaranty to be duly executed
and delivered by its duly authorized officers as of the day and year first above
written.

     

    
      	
               

            	PHH
      CORPORATION
	 	 
	 	 
	
               

            	By:
        /s/ Terence W.
      Edwards
	
               

            	Name:  Terence
      W. Edwards
	
               

            	Title:    President
      and CEO
	
               

            	 
      
	
               

            	PHH
      Corporation
	
               

            	3000
      Leadenhall Road
	
               

            	Mail
      Stop PCLG
	
               

            	Mt.
      Laurel, New Jersey  08054
	
               

            	Attention:
      Mark Johnson
	
               

            	Telecopier
      No.: (856) 917-0107
	 
      	Telephone
      No.: (856) 917-0813


    

    


     

    ACKNOWLEDGED

     

    GREENWICH
FINANCIAL CAPITAL PRODUCTS, INC.

     

     

    
      	By:  
      /s/ Regina
      Abayev	 
      
	
              Name:

            	
              Regina
      Abayev

            	 
      
	
              Title:

            	
              Vice
      President

            	 
      
	 
      	 
      	 
      
	
              THE
      ROYAL BANK OF SCOTLAND PLC

            	 
      
	
              By:

            	
               Greenwich
      Capital Markets, Inc., as agent

            	 
      
	 
      	 
      	 
      
	 	 	 
	By:  
      /s/ Regina
      Abayev	 
      
	
              Name:

            	
              Regina
      Abayev

            	 
      
	
              Title:

            	
              Vice
      President